LONDON — Britain’s new Labour government will cancel several transport projects on Monday to plug a newly discovered 20 billion pound funding shortfall it blames on the actions of the previous Conservative government.
UK’s new Chancellor to scrap projects to close budget deficit; doctors’ strike hopes rise {{^userSubscribed}} {{/userSubscribed}} {{^userSubscribed}} {{/userSubscribed}}
In a major speech later, Treasury Secretary Rachel Reeves will accuse the previous government of covering up the dire state of the country’s finances following the findings of a review of departmental spending that she commissioned three weeks ago after her left-wing Labour Party won a landslide victory returning her to power for the first time in 14 years.
“The time has come to tell the American people the honest truth,” Reeves told the House of Commons, according to the Treasury Department. “The previous administration refused to make the hard decisions, covered up the truth about our finances and ran away.”
While Gov. Reeves is not expected to announce any tax changes, her comments are being interpreted as paving the way for a revenue-raising budget in the fall.
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During the election, Labor promised not to raise taxes on “working people” and argued its policies would boost economic growth and generate needed extra revenue for the government. Income or sales tax hikes have been ruled out, but Reeves could seek to raise more revenue through other means, notably closing loopholes in capital gains and inheritance tax.
But she is expected to rein in spending and will set up a new office to identify “wasteful spending”. She also plans to end unnecessary spending on consultants and sell excess assets. Some transport projects that have yet to be funded may also be cancelled, or at least delayed. These could include scrapping the controversial tunnel near Stonehenge and extending a high-speed rail line to central London.
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Critics, particularly his predecessor Jeremy Hunt, argue that Mr Reeves was trying to score early political points in the new Parliament and had a good grasp of the financial situation by the time of the general election.
The Institute for Fiscal Studies, a highly respected economic think tank, also accused both major parties of a “conspiracy of silence” during the election about the scale of the fiscal problems facing the next government.
The government is trying to rein in spending but many issues must be resolved, inevitably requiring more money. On Monday, reports emerged that so-called junior doctors had been offered a 22% pay rise over two years, raising hopes that a long-running strike by doctors early in their careers in England might be closer to a resolution.
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Junior doctors have gone on strike 11 times in the past 20 months, with the most recent one taking place from June 27 to July 2, just days before the general election.
The state of the NHS has been one of the main election issues, with Labour saying it is “dysfunctional” and that around 7.6 million people are waiting for care.
“Ending the strike is an important step in getting the NHS back on track,” said Annie Williamson, a research fellow at the Institute for Public Policy Studies and an NHS doctor, “but the government must also address the underlying reasons why the strike happened in the first place.”
This article has been generated from an automated news agency feed without any modifications to the text.
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